Which of the following statement regarding Foreign Portfolio investment is not correct ........

Economic Affairs Foreign Investment

Which of the following statement regarding Foreign Portfolio investment is not correct?

In India SEBI regulates the foreign portfolio investment as per the guidelines issued by Reserve Bank of India.

Foreign Portfolio investment is more stable than Foreign Direct investment.

Foreign portfolio investment includes investment by foreign institutional investors (FIIs) and qualified foreign investors (QFIs).

Short-term foreign portfolio investments can be considered as hot money.

Second option is incorrect i.e. Foreign Portfolio investment is more stable than Foreign Direct investment.

The FDI flows into the primary market, while the FII flows into secondary market. FII can enter the stock market easily and also withdraw from it easily. But FDI cannot enter and exit that easily. The Foreign Direct Investment is considered to be more stable than Foreign Institutional Investor.
While FDI and FPI can be sources of much-needed capital for an economy, FPI is much more volatile, and this volatility can aggravate economic problems during uncertain times.

Hence option 2nd is incorrect.